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Home Appliances Co. wants to introduce a new digital display, laser driven iron to the market. The estimated unit sales price is $85. The required investment is $3,500,000. Unit sales are expected to be 300,000 and the minimum required rate of return on a

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college   business   accounting   Wiley   
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Answer #1

The correct answer is $ 83.25

Note :

Per Unit Target Cost = Total Cost / Total Units

= $ 24,975,000/ 300,000

= $ 83.25


UnitsPer UnitTotal ( Unit * Per Unit
Sales3000008525,500,000.00
Less: profit required

525,000.00
Cost

24,975,000.00

Profit Required = Required Investment * required rate of return

= $ 3,500,000*15%

= $ 525,000


answered by: ANURANJAN SARSAM
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Home Appliances Co. wants to introduce a new digital display, laser driven iron to the market. The estimated unit sales price is $85. The required investment is $3,500,000. Unit sales are expected to be 300,000 and the minimum required rate of return on a
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